BUSINESS wants an early referendum on the UK's membership of the European Union amid concerns that a delay would encourage a chance to "whack the political elite", according to an industry leader.

Simon Walker, director general of the Institute of Directors, believes there is a 50-50 chance that British voters will opt to leave the EU.

He will tell the annual convention of the IoD that hardly any member of the organisation wanted to leave the EU as a matter of principle, but most have doubts about Europe's institutions and wanted to see reform.

He will tell an audience of 2,000 businessmen and women: “The British political class has had two shocks this year, with the decisive re-election of a Conservative government and the choice of Jeremy Corbyn as leader of the Labour Party.

“I believe a third shock, Britain voting to leave the European Union, is at least a 50-50 possibility. Polling puts the issue on a knife-edge.”

Walker will say his concern is the timing of the referendum, adding: “I hope this government will not drag out the referendum process any longer than necessary. While our members believe some uncertainty is a price worth paying to resolve EU membership, delay puts a brake on decision-making, investment and the vigour of their businesses.

“A referendum in two years' time will see British concerns caught up in the crossfire of the French elections, in May, and the German elections, in September.”